The battleline: who wins and who loses in the latest budget

By Sheree Hoddinett  

Every year we wait with bated breath to see the outcome of the federal government budget. 

It’s not so much to see what we might actually receive, but more a case of what we will likely miss out on. 

Australians struggling with rising grocery bills, soaring rents and mortgage pressure may have been handed some targeted relief, but economists warn many households may still feel little immediate financial relief as inflation continues to bite. 

Treasurer Jim Chalmers handed down what has been described as one of the most politically risky federal budgets in recent memory, delivering tax changes aimed at easing the housing crisis while offering targeted relief for workers and families battling rising living costs.  

The budget positions younger Australians, first-home buyers and wage earners as the major winners, while property investors, landlords and wealthier Australians relying on tax concessions are among those expected to feel the greatest impact. 

At the centre of the budget is a sweeping overhaul of negative gearing and capital gains tax arrangements, which the government says will help an additional 75,000 Australians buy homes over the next decade.  

Under the changes, negative gearing will be limited to newly built homes purchased after budget night, while the long-standing 50% capital gains tax discount will be replaced with an inflation-linked system for future investments. Existing property investments will be grandfathered under the current rules.  

Mr Chalmers described the budget as a responsible one that is “all about resilience and reform”. 

“It’s all about getting Australians through the global oil shock and building an economy that works for more people,” he said. “We’re delivering more costofliving help and building a more productive economy, a better tax system, a fairer housing market and a stronger and more sustainable budget. The conflict in the Middle East is weighing heavily on our economy and compounding costofliving pressures facing Australians.” 

The government is also banking on a new Working Australians Tax Offset worth $250 annually for more than 13 million workers from 2027–28 onward. 

Combined with previously announced tax cuts, energy rebates and healthcare funding, the budget is heavily focused on cost-of-living relief. Among the clear winners are ordinary wage earners, with the budget delivering additional tax relief, cheaper medicines and expanded Medicare funding. The government has committed billions to bulk billing incentives, urgent care clinics and PBS savings aimed at reducing healthcare costs for households.  

The budget also includes $2 billion over four years to help councils and utilities deliver roads, sewerage, power and water infrastructure needed to accelerate housing construction.  

Small businesses received a mixed outcome. While the permanent extension of the $20,000 instant asset write-off will be welcomed by many, there’s likely to be plenty of disappointment over the absence of broader support to offset rising wages, insurance and operating expenses.  

Defence emerged as another major winner, with an additional $53 billion committed over the next decade, including a $14 billion lift in spending in the next four years. A big chunk of the new spending is tied to major projects like the AUKUS nuclear-powered submarine program, but there is also spending on long-range strike missiles, drones and counter-drone technology. 

Renewable energy and manufacturing projects also secured fresh support as the government continues its push toward cleaner energy and industrial transition. 

However, the budget’s biggest losers are widely seen as property investors and landlords. The changes to negative gearing and capital gains tax represent the most significant shake-up to investment property taxation in decades, with critics warning the reforms could reduce housing supply and increase rents in some markets.  

The federal government has abolished the additional private health insurance rebate previously available to Australians aged over 65, a move expected to leave more than three million people paying an extra $226 to $255 a year on average. 

Under the previous system, Australians aged between 65 and 69 were eligible for a 28% rebate on their private health insurance premiums, while those aged 70 and over received a 32% rebate. Australians under 65 currently receive a 24% rebate and the changes mean that lower rate will now apply across all age groups. 

Health Minister Mark Butler said the measure was expected to save about $3 billion over the forward estimates and about $11 billion over the next decade. The savings will help fund an additional 5000 aged care beds and expand in-home aged care services. 

However, the budget also included some relief for older Australians, with almost $450 million over five years committed to providing free RSV vaccinations for Australians aged 75 and over, as well as Indigenous Australians aged over 60. 

Despite modest improvements in projected budget deficits over the next four years, the federal budget is still not expected to return to surplus until 2034–35. The deficit for this financial year is now forecast at $31.5 billion, $2.8 billion lower than predicted in the mid-year economic and fiscal outlook (MYEFO). The projected deficit for 2025–26 has also been reduced by $8.5 billion. Small improvements have also been recorded in the forecast deficits for 2027–28 and 2028–29, alongside slight reductions in both net and gross debt projections. However, gross debt is still expected to surpass the $1 trillion mark under the latest budget forecasts. 

On a local level, budget highlights for City of Moreton Bay include an allocation of $812.5m to upgrade the Bruce Highway between the Gateway Motorway and Dohles Rocks Road, as well as the new Local Infrastructure Fund to expedite enabling infrastructure resulting in more housing.